Potential ownership: comments & questions... UPDATE... Membership info has arrived!

Discussion in 'DVC-Mousecellaneous' started by glamdring269, Oct 11, 2013.

  1. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    Home resort shouldn't be that hard, buy where you love to stay. If you haven't stayed or at least thoroughly checked out all of the resorts I would buy knowing that I might be unhappy but willing to buy a different resort later. I would expect that you test drove your car before buying and that you checked out your apartment or house before signing the contract. For maximum enjoyment, DVC shouldn't be any different. :thumbsup2

    :earsboy: Bill
     
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  3. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    Bill, my view is buy the cheapest resort that will get you to where you want to be 11 months out. IMO it's better to underbuy than overbuy. Now if you want VGF most trips or something else specific and difficult, your choices may be limited. However, I think far too many overbuy based on hype and emotion, esp for the hot new resort of BLT before now VGF with the Poly coming up. IMO it's far better to own say SSR and wish you had VGF than the reverse. For those that want to try out most or all the resorts in the system, better to own a lessor resort and even somewhat too little points in some cases. Now for some this is one and the same, if you want VGF most trips you need to own there and retail is about your only option. OTOH, if you want AKV, there's no reason to buy retail other than maybe for very small contracts. I believe right now is a bad time to buy in general because I believe resale prices are overpriced and they will come down though it may take 2-3 yrs due to the hype of VGF and the Poly.
     
  4. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    In the grand scheme of things, I don't see the cost being that much greater to buy where you love to stay. I would rather have someone buy at their favorite resort than to have them under buy and not be happy later. We played the game of waitlists and calling daily checking for availability and our non home resorts. That got old pretty fast and as you will recall the DVC changed a few years ago and is still changing. It's not the best kept secret anymore.

    Disney is changing and I don't think that we can depend on past trends being an indication of what will happen tomorrow. Disney has big plans to double the size of DTD, to keep increasing the attendance in the parks, to build additional DVC's, and to come up programs and policies to fill all resorts to capacity.

    :earsboy: Bill

     
  5. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    IF you want a given option most of the time, I'd agree with caveat's, assuming DVC makes sense at all. In many situations it doesn't for those who want the new and most expensive option like VGF. However, I don't think many direct buyers are in that boat. It is my opinion that most new buyers, not current buyers doing a directed add on, will not use their membership that way but rather over a range of resorts even when they don't think so up front. I believe many of them buy based on emotion and assumptions that often lead them to a more expensive outcome. At least with BLT you could try to make the argument of cheaper dues. As you know, I believe the current market is not representative of long term resale prices because it's hyped due to VGF. So to me it'd be say SSR at $50-60 a point or AKV at $60-70 a point depending on specifics (inc. points available, contract size) compared to VGF at more than double that with dues about a $1 more. I'm also of the opinion that situations change, preferred resorts change, usage changes, etc. over time making the perfect buy today not so perfect in a few years. We've seen many examples of that and people that thought they wanted a given resort as a new purchase only to figure out later they had other preferences.

    Given that I also feel the time value of money should be included AND people should only buy what they can afford (no consumer debt, pay cash), I do see that as a major difference cost wise in the grand scheme, even for smaller contracts for new buyers of 160 or above. Those up front dollars are sunk costs and comparing retail to resale at the same resort, wasted costs. My guess is you're taking that $10K plus and dividing it into a number of years and thinking, that's not that much. Where in my view, you'd take $10K and put it into a financial calculator with an assumed earnings rate and a long term outlook at look at that number. My opinion remains that it's almost always better to underbuy than overbuy both from a points standpoint and a resort standpoint even if you can afford it. My cutoff for those it shouldn't matter for would be the same as if you were on the way to the bank to with $10K laying in the seat and someone reached in and grabbed it. If that loss matters, so should throwing away the same amount on DVC. I realize that some want specific options and resorts and are willing to pay for them, that's certainly not what I'm talking about here.
     
  6. bisney

    bisney Earning My Ears

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    If you cannot book vacation at least 7 months in advance, then buy SSR.

    While BWV does have cheaper points for the standard view, the initial buy-in, higher MFs and shorter useful life negate much of that benefit. While a studio at SSR would cost 104 points for a week vs 78 at BWV during F&W, the price per point and MFs are approximately ~75-85% that of BWV with an additional 12 years of useful life.

    Buying where you love to stay works if you HAVE to stay at a specific resort at a specific time of year when the 11 month advantage matters. While I respect the "buy where you love to stay" camp, I don't believe that that piece of advice fits everyone.

    I believe that my family's preferences will change over time therefore buying at a specific resort for us to always stay there made NO sense to us at all. When the kids are young, we'll stay at AKV or maybe BLT. When they get a bit older, they might like to stay at BCV for the pool. When they're teens, they might prefer OKW or SSR for DTD. And if there is no availability when we plan to go, then we're more than happy to stay at SSR. And honestly, I prefer to try different things so I would find it too limiting to stay at the same resort every year... variety is the spice of life isn't it?

    We bought a smallish SSR contract allowing for the possibility of adding on in the future if there were a resort that we had to stay at every year (perhaps the Poly once resales hit the market in a few years). "Buying where you love to stay" is easier said than done when one owns at 5 different resorts. I tend to agree with Dean that it is much more prudent to purchase at the cheapest resort where you wouldn't mind staying and being conservative with the number of points purchased. IMO, I'd rather wish that I had more points than regret that I have too many.

    Best of luck to the OP.
     
  7. Annielkd22222

    Annielkd22222 Mouseketeer

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    But, you shouldn't buy where you don't like. I bought Bay Lke Tower figuring I could get anywhere else, and unfortunately as an East Coast Teacher....,that's just not the case. I don't like BLT and if I had done research, and bought resale....I wouldn't be trying to sell now.
     
  8. bisney

    bisney Earning My Ears

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    100% agree... I should have noted that we toured SSR prior to buying, which is why we would be more than happy staying there if our wait lists didn't work out. For example, even if Vero Beach had dirt cheap MFs, we wouldn't have purchased there as we have no intention of staying there if our wait lists were unsuccessful. No disrespect intended for VB owners as our family bought into DVC for WDW.
     
  9. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    The way I and others have worded this is buy the cheapest resort that you will be happy with if you're stuck there most trips and will give you an 11 month window at the desired location. For WDW this is generally SSR if looking for the cheapest/best value over time.
     
  10. Annielkd22222

    Annielkd22222 Mouseketeer

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    Completely agree with that!
     
  11. glamdring269

    glamdring269 Mouseketeer

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    Thanks again all, I do appreciate the lively discussion. SSR may ultimately be the best idea for us to at least get started but we still have a number of things to consider.

    One of those considerations is Poly. This would likely be the only place I might consider buying direct from Disney when sales go live. I love this resort. I have fond, but vague, childhood memories of the property and enjoyed the time we spent walking around last week on our way to Ohana.

    Here's my question: When do these resorts typically start to go on sale relative to their projected open date? For example, VGF is slated to open this month but when did Disney start selling those points? Just trying to understand how long we'll be waiting before seeing what details are on the table for Poly.
     
  12. SugarLoaf

    SugarLoaf ~@~ VGF ~@~

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    I believe they started selling VGF on May 23rd, 2013. (To current members) Non-members it was a little less than a month after that.
     
  13. glamdring269

    glamdring269 Mouseketeer

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    Thanks. I was actually just looking through the resource thread for something else and noticed this as well. That's a great point about the non-member date lag though.
     
  14. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    I think that the Florida timeshare laws require that a certain percentage of construction be completed before pre-sales can begin. That's one of the reasons why converting existing resort rooms to DVC is an option for the Poly. They can start making money ASAP and use the profits to fund the new construction. That's what they did at AKV's.

    :earsboy: Bill
     
  15. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    For many looking to get in and who think a new resort may be a good choice for them is to buy some points now say at SSR and then do an add on when the new resort (Poly) comes along. In many ways you get the best of both worlds. Cheaper points and fees and access to a very high demand resort for specific stays. The main negative I can see is that for many you'll pay more than you would just buying points now at say SSR due to the fact larger contracts are less than smaller ones. But it'll be much cheaper than waiting and buying all at the Poly or at VGF. In part the total number of points involved may determine the reasonableness of this approach. For 150 points total or less, it's likely not reasonable but for a larger total, north of 200, it may make sense. Plus it allows access and usage now AND access to the resort you ultimate want to use part of the time. Many people own at multiple resorts.

    Not only will you have access to inventory a little earlier in all likelihood, you'll likely get it a little cheaper than waiting and buying new for all points at that time.
     
  16. glamdring269

    glamdring269 Mouseketeer

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    Let me ask you guys a pricing question here. I know all situations are not created equal but this is just a scenario. I'm basically trying to determine value of a stripped contract.

    100 points at VWL
    $100/point asking price
    $10000 (not counting closing)
    No 13 or 14 points available. 10/15 is when first available.

    I saw a 50 point contract in the ROFR thread sell for $87/point that still had some '12 points all 13/14 points.

    So let's assume $87/point here as an offer that would drop the 100 point price down to $8700. Well, the problem here is I'm now missing two years of points. Should I also decrease the value of what I could get if I had those points and could have sold them?

    Example, 200 points x $10/point = $2000
    $8700 - $2000 = $6700
    $6700 + $1158 ($5.79/pt maintenance fee for 2 years) = $7858
    $7858 / 100 = $78.58 / point


    So I would offer $78.58 per point, or $7858.

    Am I thinking about this correctly? Or am I placing too much value on points that have been stripped from a contract? This does also assume that the $87/point start was a good place. Might be a little inflated due to the 50 point contract premium. If there is a general advice thread on how to go about negotiating prices I would love to see it. Apologies in advance if I've overlooked it.

    Thanks!

    *edited because I forgot they pay some maintenance fees* adjustment made above.
    *realized some amazing grammatical errors... corrected!*
     
  17. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    In my opinion the price of a stripped contract and to a degree, a loaded contract, should be determined based on the actual value of the points gained or lost in that year or 2. Obviously there are other factors for small or difficult to find contracts but that's the exception. Basically it's taking the value of the point you don't have (or can't use) and subtracting them from the starting neutral value. I'd use $10 a point or slightly higher as an adjustment (up or down) INCLUDING maint fees. IMO you need to be able to close and use the points to count them as value.

    Say 100 point contract for Feb UY with no 13 or 14 points. No fees reimbursed for 2013 but come Jan you'd pay the 2014 dues for an entire year of points you don't have. Then in another year you'd pay an additional month of dues for those lost fees (for Feb, more if the UY is later). I'll round off the numbers.

    100 points lost from 2013 -$500 (no points and no fees)
    100 points lost from 2014 -$1000 (no points but pay the fees)
    2015 dues -$40

    So a 100 point Feb UY contract with no 13 or 14 points with buyer paying dues for Jan and beyond is worth approximately $1550 less than a contract with all points and the 13 points either usable or banked. Subtract another $40 roughly per month (or actual fees) for a later UY. IF you had 12 points and could use them, I'd add only a small amount due the the limitations. Put another way, take the stripped contract and figure what you'd have it was loaded and you rented the points.
     
  18. CarolMN

    CarolMN DVC Co-Moderator Moderator

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    IMO, a stripped contract is worth less than a loaded one. I think your pricing rationale is just fine.

    That said, for resale, it seems to boil down to market conditions and the rules of supply & demand.

    In the last few months, the smaller point contracts (100 or less) have been selling at or very near asking price. Those who offer less often lose out to someone willing to pay list (even though rationally a stripped contract is not "worth list" compared to non-stripped contracts). It's been a sellers' market. The current market may be turning more towards the buyer.

    In the end, the best advice is to offer what you are wiling to pay. If your offer is rejected, keep trying. Good luck!

    P.S. Keep in mind that the ROFR thread is based on DIS poster buyer reports. More of the good to excellent deals will be reported than the average or not-so-good deals. People are people, LOL.
     
  19. glamdring269

    glamdring269 Mouseketeer

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    Good advice, and thanks to both of you for replying. Glad to hear I'm on the right track with my thinking at a high level, but do understand that my thinking may not be the same as other buyers (or sellers!) so in the end it boils down to what I'm willing to write a check for. Seems pretty straight forward. ;)
     
  20. glamdring269

    glamdring269 Mouseketeer

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    Another question, this time on UY...

    If I'm most likely to travel in Jun, Oct, Dec is there a problem with June UY? Based on the OP I received a suggestion of October which does make sense to me but the concern there are the amount of available Oct contracts.

    If I understand UY correctly then it seems a June UY would still give me ample time time to bank current use year points if I have to cancel an Oct or Dec trip. FYI, I doubt I would travel in JAN/FEB/MAR/APR, but could travel in last week of May potentially.

    Am I thinking about this correctly?

    Scenario:
    - June UY - 100 points
    - December '13 trip scheduled using 100 June '13 points
    - Realize I need to cancel in early November so cancel reservation.
    - Decide to bank the 100 points immediately since I know I will not be able to use them this UY.
    - June 1 2014 - I now have access to the 100 '13 UY banked points as well as the 100 '14 UY points.
    - Must use (or sell/transfer) the '13 UY points by May 31 2015 or lose them. Must bank the '14 points by Jan 31 2015 or use them by May 31 2015 or lose them.

    So based on the scenario this will work for me but I'm probably looking at this simplistically. What are the negatives to having a June UY in my scenario? I assume any negatives revolve around the usage of banked points?

    Thanks again. You have all been extremely helpful!
     
  21. chalee94

    chalee94 <font color=green>I thought all sand was ground up

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    from the OP:

    what happens if you travel in late may if you have a june UY and need to cancel? this is why you were steered away from a june UY before.

    i don't like the underlined language since you can book a stay after june 1, 2014 with those banked 13 and current 14 pts before june 1, 2014 (but i think you understand that). so in general, i think you are thinking correctly.
     

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